bitcoin and wrapped bitcoin

[menoiazei]

   Maybe dumb question but have to ask...

How is it possible

  BTC with market cap $617,557,533,865 and $58,370,958,653 volume

to share same value and price with

 wrapped bitcoin WBTC when the market cap is at $3,767,061,019 and the volume $231,802,572


     

[joniboini]

1 WBTC is 'pegged' to 1 Bitcoin, which is why the market says their price should be roughly the same. Keep in mind that there is no absolute guarantee 1 WBTC is equal to 1 BTC since you trust a custodian to hold and issue the token.

It is more or less similar to USDT or USDC that are pegged to USD.

[MrcMrc]

It is more or less similar to USDT or USDC that are pegged to USD.

That is just what you can say about wrapped bitcoin, but there are more to also know about the coins, their price is also part of bitcoin market cap, also part of ethereum market cap because it is a DeFi project. That means any increase in the demand of wrapped bitcoin will also have increasing effect on bitcoin and ethereum market cap because that is how DeFi projects like wbtc and rbtc are working. But they all have the pegged price of bitcoin.

[webtricks]

   Maybe dumb question but have to ask...

How is it possible

  BTC with market cap $617,557,533,865 and $58,370,958,653 volume

to share same value and price with

 wrapped bitcoin WBTC when the market cap is at $3,767,061,019 and the volume $231,802,572

     

The price of WBTC doesn't dictate by the market forces of demand and supply. It is a pegged token and it's value is pegged to the value of bitcoin. To understand it better, take an example: suppose I have a poker site and you deposited $100 on my website. In return, I gave you 100 chips on my platform. So, the value of 1 chip = $1.

Similarly, the institutions behind WBTC will give you 1 WBTC if you give them 1 bitcoin. So far, total 114,498 BTC has been given to them for which they have minted equivalent WBTC. The custody of BTC received is maintained by BitGo Trust.

The difference in market cap is because,
Bitcoin's market cap is calculated as  Current bitcoin Price * 18.6M (current btc circulating supply)
Wrapped Bitcoin's market cap is calculated as  Current bitcoin Price * 114,498 (current supply of btc locked for WBTC).

PS: WBTC is nothing more than a token created by organisations to bring BTC-exposure in DeFi trading. Don't consider it equivalent to BTC. It is hard-core centralized coin/token/whatever.

[webtricks]

~
PS: WBTC is nothing more than a token created by organisations to bring BTC-exposure in DeFi trading. Don't consider it equivalent to BTC. It is hard-core centralized coin/token/whatever.

WBTC is not a  single token   that wraps bitcoin via smart contract. Another one is RBTS which presents wrapped bitcoin   on RSK - the second layer  which is in potential to bring DeFi solutions  as well as faster transactions to Bitcoin blockchain itself. The current price of RBTC is ^{~ $35K while the market cap ~ $13 414 022}

Yeah, RSK is one of the L2 solution for Bitcoin, there are more, in-fact there can be 'n' number of Layer-2 solutions. All you need is a separate blockchain (ethereum in case of WBTC and independent in case of RSK) and a way to peg-in and peg-out bitcoins. I never said WBTC is the only BTC-pegged token.

But the model of WBTC is worse than the others. It is way more centralized. They have mandated the requirement of KYC/AML for the users right in their model. So, WBTC can only be acquired if user does KYC/AML with the WBTC merchants, lol. When this DeFi craze started, I thought it would bring some positives to the Crypto Industry. But as we are progressing, DeFi is doing nothing but destroying the basis of cryptocurrencies by bring such centralized coin-models and adding dangerous volatility to market by creating excess leverage.

[BrewMaster]

it is so easy and it costs nothing to create tokens and then call them "pegged to bitcoin". you can also create one for yourself if you like. that is why there are so many of them and majority don't offer anything special, just tokens that have some hype for a short time.

[Beparanf]

   Maybe dumb question but have to ask...

How is it possible

  BTC with market cap $617,557,533,865 and $58,370,958,653 volume

to share same value and price with

 wrapped bitcoin WBTC when the market cap is at $3,767,061,019 and the volume $231,802,572


     

Of course they will be the same because WBTC is actually a representative of Bitcoin in Ethereum blockchain. Crosschain is not possible right now between BTC and ETH that's why wrapping it using Bitgo service can solved everything without developing a Crosschain feature. All WBTC circulating in ETH blockchain is backed by real BTC that is stored by a trusted third party.

WBTC = BTC

The only advantage of WBTC to BTC was you can buy or invest on DeFi project without the need of swapping your BTC to ETH. But the value will still remain which is 1BTC = 1WBTC as always since its value is pegged to BTC.

[menoiazei]

   Maybe dumb question but have to ask...

How is it possible

  BTC with market cap $617,557,533,865 and $58,370,958,653 volume

to share same value and price with

 wrapped bitcoin WBTC when the market cap is at $3,767,061,019 and the volume $231,802,572

     

The price of WBTC doesn't dictate by the market forces of demand and supply. It is a pegged token and it's value is pegged to the value of bitcoin. To understand it better, take an example: suppose I have a poker site and you deposited $100 on my website. In return, I gave you 100 chips on my platform. So, the value of 1 chip = $1.

Similarly, the institutions behind WBTC will give you 1 WBTC if you give them 1 bitcoin. So far, total 114,498 BTC has been given to them for which they have minted equivalent WBTC. The custody of BTC received is maintained by BitGo Trust.

The difference in market cap is because,
Bitcoin's market cap is calculated as  Current bitcoin Price * 18.6M (current btc circulating supply)
Wrapped Bitcoin's market cap is calculated as  Current bitcoin Price * 114,498 (current supply of btc locked for WBTC).

PS: WBTC is nothing more than a token created by organisations to bring BTC-exposure in DeFi trading. Don't consider it equivalent to BTC. It is hard-core centralized coin/token/whatever.

thats good way to explain and i think i get the idea of it,
but why on earth i should change my coins over this pegged token since i can use BTC to do same job at the first place...
why anyone would prefer this or anything else pegged coin or token over the real deal??
dont see any benefit from this but then maybe i am wrong

many thanks!

[webtricks]

~~snip~

thats good way to explain and i think i get the idea of it,
but why on earth i should change my coins over this pegged token since i can use BTC to do same job at the first place...
why anyone would prefer this or anything else pegged coin or token over the real deal??
dont see any benefit from this but then maybe i am wrong

many thanks!

If the idea is to use bitcoin then yes, it doesn't make any sense to use pegged coin over bitcoin. They will try to sell their tokens by saying that you can use bitcoin with features like quick confirmation time, less fees, smart contract utility, etc etc. But in real essence, it isn't BITCOIN. Moreover, Ethereum network is facing scalability issue these days as well. In-fact, ETH fees is superseding BTC fees many a time every week.

But WBTC may come handy if someone is a regular trader. On centralized exchanges, one can easily exchange between tokens and bitcoin. But with the recent trend of DeFi, the concept of DEX is becoming popular. People are instantly trading with liquidity pools using decentralized protocol. Since, it is not possible to use BTC there, WBTC can solve the problem of BTC as base currency.

[BrewMaster]

why anyone would prefer this or anything else pegged coin or token over the real deal??
dont see any benefit from this but then maybe i am wrong

don't worry, you are not alone in this. nobody who understand how things work sees any benefit in doing something like that. as webtricks said above, these coins are being sold as "faster, cheaper,..." while they never tell you that they are also less secure, mutable and have the possibility of never being able to be converted back to bitcoin again.

the way i see it is that they are the same as stable coins, a necessary evil that people use just because they have no other option. for example traders that want to dump their tokens for bitcoin but don't want to exit the token market (that doesn't have bitcoin in it). so they have to use these pegged centralized tokens.

[fiulpro]

   Maybe dumb question but have to ask...

How is it possible

  BTC with market cap $617,557,533,865 and $58,370,958,653 volume

to share same value and price with

 wrapped bitcoin WBTC when the market cap is at $3,767,061,019 and the volume $231,802,572


     

WBTC is a BTC which is based on the ERC20 token and pegged 1:1 to BTC and I do think that it's an amazing solution but do think it would take some time to flourish. I do believe that ERC20 is more or less very advanced but then again BTC is more trustable and in the future this symbiotic relationship can prove to be a boon.

See to answer your question know that : WBTC is NOT BTC 🚫
It's actually ERC20 token which is equivalent to 1 BTC as promised by the company which doesn't mean that it would actually be equivalent to BTC.

If you really are interested and thinking of investing either invest in BTC or ETH leave the WBTC for future since I do believe that the trading of these tokens do provide us with our very own WBTC. It's a good concept but not needed.

[Broly46]

Wrapped btc actually work out like charm in the form of ethereum smart contract, although this is not a brand new idea, it has been tried back in 2017, but the effort doesn’t  turn out satisfying, there was hacking and dev team wrecking up, and it isn’t going anywhere then, the defi seem to be working, I believe it’s the big money that’s the whole reason to make a project successful. And yup there are mainly traded on link, uniswap, sushiswap, 1inche, snx, bancor etc, there we have a market move going on.

[Kupid002]

   Maybe dumb question but have to ask...

How is it possible

  BTC with market cap $617,557,533,865 and $58,370,958,653 volume

to share same value and price with

 wrapped bitcoin WBTC when the market cap is at $3,767,061,019 and the volume $231,802,572


    

I think you. need to read what wrapped bitcoin is first https://help.coinbase.com/en/coinbase/trading-and-funding/cryptocurrency-trading-pairs/wbtc#:~:text=Wrapped%20Bitcoin%20(WBTC)%20is%20an,Bitcoin%2C%20and%20vice-versa. .

This currency has the same value of bitcoin they only created that tokens to have alternative to bitcoin that can be use in ethereum blockhain which is the real porpuse is to use it in different dapp . it give the ability to owner to participate in different defi project by owning WBTC.

[menoiazei]

   Maybe dumb question but have to ask...

How is it possible

  BTC with market cap $617,557,533,865 and $58,370,958,653 volume

to share same value and price with

 wrapped bitcoin WBTC when the market cap is at $3,767,061,019 and the volume $231,802,572


     

I think you. need to read what wrapped bitcoin is first https://help.coinbase.com/en/coinbase/trading-and-funding/cryptocurrency-trading-pairs/wbtc#:~:text=Wrapped%20Bitcoin%20(WBTC)%20is%20an,Bitcoin%2C%20and%20vice-versa. .

This currency has the same value of bitcoin they only created that tokens to have alternative to bitcoin that can be use in ethereum blockhain which is the real porpuse is to use it in different dapp . it give the ability to owner to participate in different defi project by owning WBTC.

Read their white paper and everything before I ask the question , also yes I get the point that price is pegged to BTC but from economics point of view if you compare trading volumes and market caps seems like WBTC is way overpriced for what it is...